Properties Market News

Singapore saw the capital values of strata retail units increase in Q2 while retail rents remained relatively flat, according to a DTZ report.

Notably, both the average resale capital values of prime retail units in suburban areas and Orchard/Scotts Road increased 0.8 percent quarter-on-quarter, based on a basket of completed properties monitored by DTZ Research.

"Capital value growth is expected to stay firm due to the limited supply of prime strata retail units. While investor interest in strata retail units remains strong due to their relatively affordable quantum and the absence of cooling measures for the retail sector, the limited supply means that sellers require a premium before letting go of their units," said Lee Lay Keng, DTZ's Regional Head (SEA), Research.

"Prime strata retail units in Orchard/Scotts Road continue to be highly sought-after by investors due to the scarcity of such units."

In other city areas, resale capital values of prime strata retail units were flat in Q2.

The report noted that while retail rents remained flat in most areas in Q2 due to the differing expectations of landlords and retailers, only upper-storey retail rents in other city areas posted a marginal decline of 0.8 percent quarter-on-quarter.

"Even though landlords may offer flexible leasing arrangements, retailers continue to be cost-conscious and seek to keep their occupancy costs low as they grapple with other variable factors such as food, labour and management costs," she added.

The decline in tenant sales is also in line with the fall in retail sales in April 2014, based on the Department of Statistics data.

Moreover, the drop in retail sales may have been aggravated by the decline in tourist arrivals to Singapore.

But despite the lacklustre retail sales, DTZ still expects retail rents to remain firm or trend upwards in Orchard/Scotts Road, on the back of limited supply.

Notably, only around 4.9 percent of the total pipeline supply up till 2018 of 5.8 million sq ft will be located in Orchard/Scotts Road.

In the current quarter, more properties which were repossessed from borrowers were put up for auction, said media reports.

According Colliers International, 42 foreclosed properties went under the hammer in Q2 2014, up from 22 in the first quarter and just six a year ago.

This figure is also expected to increase further due to the growing supply of non-landed private homes, which will make it difficult for borrowers to sell their properties by themselves, resulting in mortgagee sales.

The lower number of expatriates coming here is also affecting rental incomes and borrowers' ability to repay their loans.

The mortgagee sale in Q2 2014 is the highest since the third quarter of 2009, when 63 properties were put up for auction. The 64 properties sold in the first half of the year also exceed the total tally in 2012, when 24 properties were disposed in this manner.

In comparison, the number of properties auctioned off by owners fell to 192 in first half of the year versus 226 in H1 2013.

Consequently, the share of mortgagee sales climbed to 25 percent in H1 2014 from 6.6 percent for the whole of 2013.

The mortgagee sales' share also doubled to 33.9 percent in Q2 2014 from 16.7 percent in the previous quarter. This is also largest percentage since Q1 2008, when mortgagee sales accounted for 35.5 percent of the transactions.

Colliers' data was based on the sales lists of major auction houses as of 19 June.

The growing number of vacant condominiums in Singapore saw potential tenants viewing double the number of properties compared to two years ago.

This is because "there are lots of choices from newly completed projects. And as long-term expats move to newer condos, older properties are also coming to the market for tenants," according to Century 21 chief executive Ku Swee Yong in media reports.

He noted that investors may be keeping their units empty in newly completed projects in hopes of strong capital appreciation from selling it.

With this, keeping the unit vacant temporarily will facilitate viewings. Also, potential buyers who are keen on occupying the unit may not favour a property with an ongoing lease.

Ku said, "Of course, the flipside to keeping the unit empty, would be that the owner may not be aware of any defects that he could get rectified for free by the developer during the one-year defects liability period. Moreover, a new property that is left empty deteriorates faster than one that's well-used."

He advised such owners to either rent the unit at a discounted rate or sell the property with lower expectations for capital appreciation.

The H2 2014 Government Land Sales (GLS) Programme will comprise nine Confirmed List sites and 14 sites on the Reserve List.

These sites can yield up to 10,200 private home units, including 1,500 Executive Condominium (EC) units.

The Confirmed List contains six private residential sites (including three EC sites), and two sites for mixed developments. The residential sites are located across all regions and can yield about 3,900 private residential units (including 1,500 EC units).

12 private residential sites and one White site are included in the Reserve List, which can yield about 6,300 private home units.

In a statement, the government said the supply from the H2 2014 GLS Programme, along with the supply from projects underway, is expected to meet the demand for private housing and commercial space over the next few years.

In H1 2014, about 4,600 private homes were released on the Confirmed List, while 7,000 homes were released via the Reserve List.

Image (by URA): A mixed development site at Holland Road will be placed on the Confirmed List as part of the Holland Village Extension plan unveiled in the Master Plan 2014.

Heritage experts and architects have identified 45 structures in Singapore that are worthy of conservation and considered "sacred", according to media reports.

Among them are Newton Food Centre, Hong Lim Park fountain and the Shuang Long Shan Ancestral Hall, a Hakka memorial hall from 1887.

The suggestions follow Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, call for the making of a list of places that Singaporeans treasure and declare them as national shrines to foster love for the country. He pointed to East Coast Park (pictured), Botanic Gardens and old Chinatown as some of such places.

In a commentary last month, Prof Kishore quoted US urban geographer Joel Kotkin, who listed three great characteristics of cities – busy, safe and sacred. Prof Kotkin noted that while Singapore excelled in commerce and security, it lacked the last quality.

He called for Singaporeans to pay more attention to the sacred, which he defined as any place or unique institution "that (makes) one feel an irrational commitment to a place."

Heritage experts believe it is a timely suggestion.

Civic group founder Kwek Li Yong said, "If we want to create a country that Singaporeans can identify with, we need to pinpoint and pull out such spaces, rediscover them and save them before they are swept away by redevelopment,"

PropertyListings.sg
is the top Singapore Property website – your one stop property resource website.
We provide the resources for your property needs regardless of whether you are a
real estate agent, property owner, landlord, buyer or tenant.

PropertyListings.sg enables one to have a view of the up-to-date new launches of
condos and search for properties in Singapore comprise for selling or renting purposes.
You are able to look for the property that you have in mind or simply with the purpose
of browsing through the properties. You could retrieve supple amount of information
just by refining your search.

This website enables you to view the properties which will show the details and
media such as photos/videos and maps. All the popular properties can be found in
the Hot Properties category.

Overseas projects that are launched are showcased in Overseas Properties.

With the Directory function, it will be easier to navigate all the sub-directories.
The directories that could be found are Condo, HDB, Agent, School, Shopping, Contractor,
Hotel, Commercial and Industrial. The whole listing for each sub-directory is displayed
to assist you in searching for the properties you are looking for.

We also provide the users with the general property market news and resources that
consist of some useful links that are worth reading and useful for one’s knowledge
on properties in Singapore as well as just about anything property-related.

Sign up to receive regular updates on the latest property newsletters.